Sony Mobile Cutting Jobs, Relocating as Company Prepares for Mobile Fight

Sony Mobile, distancing itself from the former Sony Ericsson brand and getting ready to take on the mobile market, plans to cut 1,000 jobs and move its headquarters from Sweden to Tokyo.

Sony is getting down to the mobile business. In October it will move its mobile operations' corporate headquarters from Lund, Sweden, to Tokyo and reduce its global workforce by approximately 15 percent, or 1,000 workers, the company said in an Aug. 23 statement.

In February, Sony completed the acquisition of Ericsson's 50 percent share of Sony Ericsson and renamed the brand Sony Mobile Communications. The relocation and cuts follow a redefining of roles and responsibilities within the company, meant to "enhance operational and development capabilities of Sony Mobile such as time-to-market efficiency, streamline supply-chain management and drive greater integration with the wider Sony group," Sony said in a statement.

Kunimasa Suzuki, Sony Mobile's president and CEO, said that the convergence with the wider Sony group comes as "Sony has identified the mobile business as one of its core businesses and the Xperia smartphone portfolio continues to gain momentum with customers and consumers worldwide."

Sony Mobile faces no small challenge in working to make a space for itself in the smartphone market. But unlike an HTC or Motorola, it has its television and mobile gaming assets-Sony screens consumers are already staring at-working in its favor.

"Sony has plenty of opportunities, even though it has squandered quite a few already," Roger Kay, principal analyst with Endpoint Technologies told eWEEK. "Still, it's a major electronics company with lots of know-how and IP. Cutting jobs is only a start. It also needs to build up the teams that can lead it forward."

The terms of Sony's agreement with Ericsson limited it from "adding features such as wireless connectivity to products like tablet computers and digital readers," The Wall Street Journal reported Aug. 23. "The nature of the venture," it added, "also slowed down development of new phones or key decisions about the business."

In June, Sony began selling the Sony Xperia ion through AT&T. The sharply rectangular phone-a reminder of the Nokia Lumia 900 in more than its $100 price at launch- features a 4.6-inch HD Reality Display and a Mobile Bravia Engine. Said to be borrowed from the Sony television line, the engine hints at the well of assets from which Sony Mobile, unlike some of its competitors, has to draw.

Of course, Samsung-now the world's leading manufacturer of smartphones-is one competitor with a similar well.

At a New York event this month, introducing the Galaxy Note 10.1, a tablet that includes infrared burst technology, enabling it to act as a universal remote, a Samsung executive joked that the company expects users to pair the tablet with a Samsung TV. Minutes later, he described the tablet as the best companion device for users of the Samsung Galaxy S III smartphone, now more than 10 million strong.

Over a matter of quarters, Samsung has come to dominate the smartphone market while fellow Android supporters, as well as brands such as Nokia and Research In Motion, watch their market shares dwindle.

From the second quarter of 2011 to the second quarter of 2012, Samsung grew its share of the smartphone market by 172.8 percent, from 17 percent to 32.6 percent, according to IDC. Apple's second-quarter share was 16.9 percent, followed by Nokia, with 6.6 percent and HTC with 5.7 percent.

Sony's share in the quarter was approximately 4 percent, according to Strategy Analytics.

Sony Mobile, in its statement, added that while the majority of its job cuts will take place at its Lund facility in Sweden, Lund will continue to be of strategic importance for the brand, with its "main focus on software and application development."

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